Hiring Someone as a W2 vs 1099 & Their Differences

When deciding between hiring a W-2 employee or a 1099 contractor, business owners must weigh tax responsibilities and the level of control over the worker. W-2 employees require payroll tax withholding, benefits, and more oversight, while 1099 contractors handle their own taxes and work independently. Misclassification can lead to penalties, so if the business controls how and when work is done, a W-2 is likely appropriate; if the worker operates independently, 1099 may be the better fit.